Q: how do i redeem gift card on ibook?

You can redeem an iTunes gift card as per the instructions on the page that you posted from - as long as you are buying the book for yourself (you can't gift via your account's balance) then your balance should be automatically used.

From http://support.apple.com/kb/HT5582 :

When making purchases, content credits are used first, followed by Gift Certificate, iTunes Card, or Allowance Account credits; your credit card or PayPal account is then charged for any remaining balance.

it does not automatically take the credit on my gift card it charges my credit card on file.  How do I fix that?

As long as you aren't gifting the book, and you are using the account that you redeemed the gift card onto (a balance shows on your account ?), then contact iTunes Support and see if they know why it's happening, either via the 'report a problem' page : http://reportaproblem.apple.com

Or via : http://www.apple.com/support/itunes/contact/ -